Markup versus margin
Markup starts from cost: it is the percentage added on top of what you paid. Margin starts from price: it is the percentage of the final price that is profit. Because price is always bigger than cost, the same dollars produce a bigger-looking markup — a 50% markup on a $100 item is a $50 profit, but that is 33.3% of the $150 price. Mixing the two up is the classic pricing mistake: “50% margin” prices an item at double cost, while “50% markup” leaves margin well below half.
Setting a markup that works
A markup has to cover more than the item itself: rent, labor, spoilage, returns, card fees, and the items you never sell all come out of the same pool of gross profit. Retail markups commonly run 50–100%, while groceries accept far less and jewelry expects far more. The useful check is whether margin × realistic volume covers your fixed costs — the break-even calculator turns that question into a number of units.
Frequently Asked Questions
How do I convert markup to margin?
Divide the markup by itself plus 100. A 50% markup becomes 50 ÷ 150 = 33.3% margin; a 100% markup is a 50% margin.
Can markup be negative?
Yes — clearance pricing often sells below cost. This calculator allows any markup above −100%, which is the point where the price itself would turn negative.
Does the revenue figure include taxes?
No. Revenue here is price × units before sales tax; add your local sales tax separately at the register or invoice level.